NIFTY REBOUNDS AFTER TESTING 20-DMA SUPPORT; 12038 CONTINUES TO BE IMMEDIATE HURDLE

NIFTY REBOUNDS AFTER TESTING 20-DMA SUPPORT; 12038 CONTINUES TO BE IMMEDIATE HURDLE

WORLD MARKETS

US indices gained 0.2%-0.4% on Friday following on hopes of trade deal between US and China.

President Donald Trump told Fox News both sides were “very close” to reaching a trade agreement, nothing: “We have a very good chance to make the deal.” His comments came after Chinese President Xi Jinping said that Beijing wants to work for a trade deal with the U.S. but is not afraid to “fight back.” Xi also told a visiting U.S. business delegation that China holds a “positive attitude” toward the trade talks.

On the data front, consumer sentiment for November rose to 96.8 from 95.5 in October. IHS Markit’s gauges for the U.S. services and manufacturing sectors also rose.

Brent crude shed 40 cents to settle at $63.57 a barrel while WTI crude fell 81 cents to $57.77.

In Europe, FTSE soared 1.2% while DAX and CAC rose 0.2% each. Germany avoided a recession in the third quarter as GDP expanded by 0.1%. IHS Markit’s flash euro zone PMI in November slid to 50.3 from 50.6 in October. UK Flash manufacturing PMI came in at 48.3 compared to 49.6 in October, while services PMI dropped to a 40-month low of 48.6.

For the week, the S&P 500 lost about 0.3%, breaking six-week winning streak. The Dow declined 0.5%, snapping five-week upmove. The Nasdaq ended a seven-week winning streak, dropping 0.3%.

AT HOME

Sensex and Nifty slipped nearly half a percent, extending the losing streak to second consecutive day. Sensex lost 215 points to settle at 40359 while Nifty finished at 11914, down 54 points. BSE mid-cap index fell 0.1% while small-cap indices ended little changed. BSE IT and Teck indices tumbled 2.2% and 2% respectively, becoming top losers among the sectoral indices while Metal index climbed 2.1%, becoming top gainer, followed by 0.7% higher Power and Utilities indices.

FIIs net bought stocks worth Rs 306 cr but net sold index futures and stock futures worth Rs 833 cr and 42 cr respectively. DIIs were net sellers to the tune of Rs 177 cr.

Rupee appreciated 5 paise to end at 71.71/$.

For the week, Sesnex ended flat while Nifty rose 0.2%.

OUTLOOK

A media reports today morning suggested that “phase two” trade deal between US and China is unlikely to come soon.

Today morning, Nikkei and Hang Seng are up 1% each, Shanghai is flat and SGX Nifty is suggesting about 15 points higher start for our market.

In Friday's report we had reiterated the view that, 12038 continued to be immediate hurdle while 11910 continues to be immediate support.

Nifty, after touching a low of 11883, recovered to close at 11914.

11883, the low made on Friday, also coincided with 20-DMA and hence is the immediate support to eye. If that gets violated, 11802, the immediate previous bottom on daily chart, made on 14th November, would be the next support.

12038, the top made last week, which also coincided with the top made earlier in the month, continues to be immediate hurdle.